Correlation Between Ssangyong Information and Pum Tech
Can any of the company-specific risk be diversified away by investing in both Ssangyong Information and Pum Tech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ssangyong Information and Pum Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Information Communication and Pum Tech Korea Co, you can compare the effects of market volatilities on Ssangyong Information and Pum Tech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ssangyong Information with a short position of Pum Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and Pum Tech.
Diversification Opportunities for Ssangyong Information and Pum Tech
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ssangyong and Pum is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic and Pum Tech Korea Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pum Tech Korea and Ssangyong Information is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ssangyong Information Communication are associated (or correlated) with Pum Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pum Tech Korea has no effect on the direction of Ssangyong Information i.e., Ssangyong Information and Pum Tech go up and down completely randomly.
Pair Corralation between Ssangyong Information and Pum Tech
Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the Pum Tech. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 2.43 times less risky than Pum Tech. The stock trades about -0.01 of its potential returns per unit of risk. The Pum Tech Korea Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 4,150,000 in Pum Tech Korea Co on October 15, 2024 and sell it today you would earn a total of 600,000 from holding Pum Tech Korea Co or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Information Communic vs. Pum Tech Korea Co
Performance |
| Timeline |
| Ssangyong Information |
| Pum Tech Korea |
Ssangyong Information and Pum Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Information and Pum Tech
The main advantage of trading using opposite Ssangyong Information and Pum Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information position performs unexpectedly, Pum Tech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pum Tech will offset losses from the drop in Pum Tech's long position.| Ssangyong Information vs. Kbi Metal Co | Ssangyong Information vs. Hanjoo Light Metal | Ssangyong Information vs. Choil Aluminum | Ssangyong Information vs. PJ Metal Co |
| Pum Tech vs. Kbi Metal Co | Pum Tech vs. Ssangyong Information Communication | Pum Tech vs. Youngsin Metal Industrial | Pum Tech vs. Daiyang Metal Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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